We reviewed one society’s formal PCP and discussed the plan and its alternatives with the society’s executive director and the staff responsible for it. We also interviewed CPAs who acquired the participants’ practices, attorneys who negotiated the transfers of ownership, and CPAs who recently joined or withdrew from PCI’s. We then developed a questionnaire to gather data regarding the experiences of other societies with PCPs. Sole practitioners should have a practice continuation agreement and partners a buy-sell agreement.

The seller’s clients and staff are generally accustomed to their current location. If the buyer is not taking over the lease, adequate space to house the practice and keep clients comfortable will have to be provided. If the buyer is taking over the space, a due diligence review of the current lease should be performed. Prior to investing time in due diligence, the buyer and the seller should have at least the framework of a deal crafted. The parties should exchange generic but specific, detailed information about their respective businesses.

STEP 9: Perform Due Diligence

PCPs are important mostly to individually owned CPA firms. Large firms have PCPs imbedded in their partnership agreements. Even two-partner firms have a PCP; the surviving or healthy partner remains to carry on. The sole proprietor, however, needs a PCP when death or disability makes continuity https://xero-accounting.net/ of the practice problematic. Search the #1 inventory of practices for sale in North America with Accounting Practice Sales. We are skeptical about whether APS’s mark is protecta-ble. See Platinum Home Mortgage Corp. v. Platinum Financial Group, 149 F.3d 722, 728 (7th Cir.1998).

To assist in this step, we can provide a comprehensive sample Purchase Agreement. To a large degree, the success of your meeting will depend on your ability to connect with the seller. The seller has a lot invested, both financially and emotionally, in the practice and wants to ensure that it is turned over to someone who will take care of it.

Can an accounting practice be financed?

Be proactive in your tax planning and in all interaction with your clients. Understanding some of the nature of the practice’s clients which includes industries, longevity, and complexity of the work. When approaching the due diligence process, always begin with a focus on only the high-level information. We’ve seen buyers want to jump right into the details sale of accounting practice agreement and end up losing sight of the big picture items that really help them determine their opportunities and obstacles. Most of the high-level information is gathered through inquiry. Terms – Seller/Vendor financing and contingent pricing will impact the price. Cleaner terms are much more desirable for the seller and therefore generally go with a lower price.

• Talk to them about their tax situation; see if there is anything that can be done to help them before year end.
• If the payment is to be in the stock of the acquirer, the exchange ratio at which the seller’s shareholders will swap their shares for the shares of the acquirer will be stated.
• Do you have any employees that can put your sale at risk?
• Earnouts are popular deal structures for CPA firms that are sold privately, but they have major drawbacks.
• On the likelihood-of-confusion issue, the district court could similarly find at least a good-faith basis for APS to argue that consumers would be confused.
• He also sought to pierce the corporate veil to hold Gary Holmes, the owner of APS, personally liable for any judgment against APS.

Be prepared to smooth over client relationships in the rare instance of a client’s becoming irritated with the buyer. Reassure clients that you will assist the buyer throughout the transition and will be available to help them when needed. Be cognizant of the people side of your CPA practice. Maintain an upbeat demeanor in all communications.

Listing 24 Results Sale Of Accounting Practice

It is always surprising to hear how many accountants are unaware of what their profit margins are. It is important to note that most buyers are looking for a minimum baseline EBITDA of 50%. If you have boxes of client files laying around your office, it’s time to scan them and get them uploaded into a secure storage cloud.

If you missed our recent podcast with Chris Sloan on contracts, that is an excellent resource to check out. Chris has a very rare and refreshing approach to creating contracts. If the payment is to be in debt, this clause states the terms of the promissory note, and may include reference to a security agreement that states the secured position of the seller in the assets of the acquirer. The detailed debt documents are included in the accompanying exhibits. We set out to determine the nationwide use of PCPs by asking each society whether it has a formal or informal PCP and how it develops or promotes the plan. One result-a100% response to the questionnaire– indicates the importance of the issue.

What is the Value of an Accounting Practice? – Poe Group …

When choosing a broker, look for a company with a deep understanding of the industry and with experience creating strong deals. Choosing the right broker can remove much of the stress of purchasing a CPA firm and make the process run much more smoothly. If you’re looking to grow an existing CPA firm or start a start a new consulting endeavor, finding an accounting business for sale could be a great path.